Probability Change
In prediction markets, probabilities update as trades occur and information arrives. Probability change captures the size and direction of that update over a chosen interval.
A positive probability change indicates growing belief in an outcome, while a negative change signals declining confidence. The magnitude shows how strong the shift is. Probability change does not explain the cause by itself. The same change can result from genuine new information, low liquidity, or behavioral reactions. Timing and context matter. Early changes often reflect uncertainty and exploration, while late changes tend to reflect confirmation, reversal, or overreaction.
For analysts, probability change is a core element of prediction markets data. It enables precise measurement of reactions, sensitivity, and belief updating.
Why It Matters
Probability change shows when expectations shift and by how much. It helps users distinguish meaningful belief updates from routine noise.
What typically drives large probability changes in prediction markets?
Large probability changes are usually driven by new information, major trades, or sudden attention shifts. Breaking news and data releases are common triggers. In thin markets, even small trades can cause outsized changes. Analysts verify drivers using volume and liquidity signals.
How is probability change different from volatility in prediction markets?
Probability change measures a specific difference between two moments. Volatility measures how much probabilities fluctuate over a longer period. Change is event-focused, while volatility is pattern-focused. Both are used together in prediction markets data analysis.
How do analysts use probability change to assess market efficiency?
Analysts study probability change to see how quickly and proportionally markets react to information. Delayed or exaggerated changes can signal inefficiency. Comparing changes across events reveals responsiveness differences. This supports evaluation of market quality and learning behavior.
Real-World Example
On Polymarket, an outcome moving from 0.30 to 0.50 after a verified announcement represents a large probability change. Analysts check whether the change stabilizes or reverses as participation broadens.
Probability Change and FinFeedAPI
FinFeedAPI’s Prediction Markets API provides time-stamped prediction markets data needed to calculate probability change. Analysts can compute changes across custom intervals and align them with volume, liquidity, and event timelines. This supports reaction analysis, efficiency studies, and forecast evaluation. The API enables consistent probability change analysis across prediction markets.